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Bread - US - November 2011

With 2011 total U.S. sales of $21.6 billion, the bread market is clearly an important source of revenue for manufacturers and retailers alike. However, given the maturity of this market combined with the near universal usage of bread, manufacturers are challenged to develop new usage occasions among existing bread consumers, rather than focusing on trying to attract new shoppers to the category. From the retailer’s perspective, bread is an essential market to represent well, as bread is a key foot traffic builder, and private label brands command an increasingly sizeable market share.

Bread’s wide range of price points, which span from private label/value brands on the low end all the way up to premium brands, have been instrumental in helping the category weather the ongoing economic downturn fairly well. However, it is important to find ways to maintain consumer interest in a category that many shoppers may perceive as uninspiring.

In this report, Mintel provides an in-depth look at the current state of the U.S. retail bread market, with focus directed in the following areas:

  • What manufacturers and retailers can and should do to maintain consumer interest in the bread market
  • The impact of Grupo Bimbo’s acquisition of Sara Lee
  • The impact of competitive channels, including restaurants that feature bread, bagels and rolls; and in-store bakeries (ISBs) that compete directly for bread market share
  • The overall market drivers favorably and negatively impacting the bread market, and how much influence they have on the sector
  • The bread segments that are performing well and ones that show room for improvement
  • Marketing strategies among select bread manufacturers, and the effectiveness (or ineffectiveness) of these endeavors
  • The rise of private labels and what manufacturers of name brands can and are doing to compete effectively
  • How bread manufacturers have responded to consumers’ interest in eating better, and the latest Mintel custom consumer survey data that pertains to the better-for-you (BFY) bread sector
  • What manufacturers and retailers can do to generate more household usage occasions in the bread sector
  • The impact of various socioeconomic, gender, age, race/ethnicity and other demographic factors on the bread market, with primary discussion about younger adults (18-34s) who represent a target market for innovation and promotion

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Table of contents

  1. Scope and Themes

    • What you need to know
      • Definition
        • Data sources
          • Sales data
            • Consumer data
              • Advertising creative
                • Abbreviations and terms
                  • Abbreviations
                    • Terms
                    • Executive Summary

                      • U.S. retail bread market reaches new high in 2011
                        • New food guidelines and economic factors may impact bread consumption
                          • Bread market is facing competition on a variety of fronts
                            • Loaf bread leads in sales, but rolls/buns/croissants leads in growth
                              • Supermarkets lead overall but “other” retailers gaining share
                                • BFY attributes and store brands are focus of innovations
                                  • Bread marketers have yet to embrace social media in a big way
                                    • The bread products consumer
                                    • Insights and Opportunities

                                      • Capitalize with global and BFY bread offerings
                                        • Develop cross-promotions with sister brands
                                          • Branded bread stores
                                            • Introduce flavor-based tortilla shells
                                            • Inspire Insights

                                                • Trend: A Simple Balance for Health
                                                  • Trend: Premiumization and Indulgence
                                                  • Market Size and Forecast

                                                    • Key points
                                                      • Bread market reaches new high in 2011
                                                        • Sales and forecast of bread
                                                          • Figure 1: Total U.S. retail sales of bread, at current prices, 2006-16
                                                          • Figure 2: Total U.S. retail sales of bread, at inflation-adjusted prices, 2006-16
                                                        • Fan chart forecast
                                                          • Figure 3: Fan chart forecast of bread, 2006-16
                                                        • Walmart sales
                                                        • Market Drivers

                                                          • New food pyramid encourages whole grain consumption
                                                            • Restaurant index continues decline making for more at-home eating
                                                              • Figure 4: National Restaurant Association RPI
                                                            • Projected race/ethnicity growth creates larger target audience
                                                              • Figure 5: Population, by race and Hispanic origin, 2006-16
                                                            • Households with children in decline
                                                              • Figure 6: Households, by presence of children, 2000-10
                                                            • Bread prices rising during challenging economic times
                                                              • Figure 7: Real disposable personal income, January 2000-Aug. 1, 2011
                                                              • Figure 8: University of Michigan index of consumer sentiment, January 2007-August 2011
                                                          • Competitive Context

                                                            • Key points
                                                              • Private label casts a large shadow over bread market
                                                                • Grupo Bimbo solidifies its presence with Sara Lee acquisition
                                                                  • ISBs growing in number and weekly sales
                                                                    • Figure 9: Number of ISBs and average weekly sales per store*, 2006-11
                                                                  • Casual restaurants may be luring bread consumers
                                                                  • Segment Performance

                                                                    • Key points
                                                                      • Weak performance by larger segment restrains category growth
                                                                        • Sales of bread 2009-11
                                                                          • Figure 10: FDMx sales of bread, by segment, 2009-11
                                                                          • Figure 11: FDMx volume* sales of bread, by segment, 2006-11
                                                                        • Sales and forecast in FDMx
                                                                          • Figure 12: Sales of bread in FDMx, 2006-16
                                                                      • Segment Performance—Fresh Loaf Bread

                                                                        • Key points
                                                                          • Fresh loaf bread 2011 sales flat
                                                                            • Sales and forecast of fresh loaf bread
                                                                              • Figure 13: FDMx sales of fresh loaf bread, 2006-16
                                                                          • Segment Performance—Fresh Rolls, Buns and Croissants

                                                                            • Key points
                                                                              • Segment continues its growth trajectory albeit at slower pace
                                                                                • Sales and forecast of fresh rolls, buns and croissants
                                                                                  • Figure 14: FDMx sales and forecast of fresh rolls, buns and croissants, at current prices, 2006-16
                                                                              • Segment Performance—Tortillas

                                                                                • Key points
                                                                                  • Tortilla sales flat in 2011
                                                                                    • Sales and forecast of tortillas
                                                                                      • Figure 15: FDMx sales and forecast of tortillas, at current prices, 2006-16
                                                                                  • Segment Performance—Fresh Bagels, Bialys and English Muffins

                                                                                    • Key points
                                                                                      • Segment posts new sales high in 2011
                                                                                        • Sales and forecast of fresh bagels, bialys and English muffins
                                                                                          • Figure 16: FDMx sales and forecast of fresh bagels, bialys and English muffins, at current prices, 2006-16
                                                                                      • Segment Performance—Refrigerated/Frozen Bread, Bagels, Bialys and English Muffins

                                                                                        • Key points
                                                                                          • Sales grow in 2011 but are at 2008 levels
                                                                                            • Sales and forecast of refrigerated/frozen bread, bagels, bialys and English muffins
                                                                                              • Figure 17: FDMx sales and forecast of refrigerated/frozen bread, bagels, bialys and English muffins, at current prices, 2006-16
                                                                                          • Retail Channels

                                                                                            • Key points
                                                                                              • Supermarket bread sales growing stale
                                                                                                • Mass merchandisers and drug stores well-positioned for growth
                                                                                                  • Sales of bread, by channel
                                                                                                    • Figure 18: Total U.S. retail sales of bread, by channel, 2009 and 2011
                                                                                                    • Figure 19: Supermarket/food store sales of bread, at current prices, 2006-11
                                                                                                    • Figure 20: Other retailer sales of bread, at current prices, 2006-11
                                                                                                • Retail Channels—Natural Supermarkets

                                                                                                  • Key points
                                                                                                    • Insights
                                                                                                      • Sales of bread in the natural channel
                                                                                                        • Figure 21: Natural supermarket sales of bread, at current prices, 2009-11
                                                                                                        • Figure 22: Natural supermarket sales of bread, at inflation-adjusted prices, 2009-11
                                                                                                      • Natural channel sales by segment
                                                                                                        • Figure 23: Natural supermarket sales of bread, by segment, 2009 and 2011
                                                                                                        • Figure 24: Natural supermarket sales of bread, by organic content, 2009 and 2011
                                                                                                        • Figure 25: Natural supermarket sales of bread, by gluten-free content, 2009 and 2011
                                                                                                    • Leading Companies

                                                                                                      • Key points
                                                                                                        • Private label has largest share but minimal growth
                                                                                                          • Grupo Bimbo continues acquisition strategy
                                                                                                            • Figure 26: Manufacturer FDMx sales of bread in the U.S., 2010 and 2011
                                                                                                        • Brand Share—Fresh Loaf Bread

                                                                                                          • Key points
                                                                                                            • Private labels leading fresh loaf bread
                                                                                                              • Some BFY brands could use a healthy sales boost
                                                                                                                • Figure 27: Selected FDMx brand sales of fresh loaf bread, 2010 and 2011
                                                                                                            • Brand Share—Fresh Rolls, Buns, and Croissants

                                                                                                              • Key points
                                                                                                                • Private label rolls to top of segment
                                                                                                                  • Ball Park may be a hit
                                                                                                                    • Consumer interest in “thin” breads may be waning
                                                                                                                      • Figure 28: Selected FDMx brand sales of fresh rolls, buns and croissants, 2010 and 2011
                                                                                                                  • Brand Share—Tortillas

                                                                                                                    • Key points
                                                                                                                      • Gruma S.A.’s diverse product portfolio helps it appeal to more consumers
                                                                                                                        • Olé Mexican Foods benefits from consumers’ interest in authentic products
                                                                                                                          • Private label unable to turn bad economy into better sales
                                                                                                                            • General Mills’ innovation eating into core brand’s sales
                                                                                                                              • Figure 29: Selected FDMx brand sales of tortillas, 2010 and 2011
                                                                                                                          • Brand Share—Fresh Bagels, Bialys and English Muffins

                                                                                                                            • Key points
                                                                                                                              • Grupo Bimbo dominates segment and will soon get even bigger
                                                                                                                                • Limited manufacturer activity may hinder innovation
                                                                                                                                  • Figure 30: Selected FDMx brand sales of fresh bagels, bialys and English muffins, 2010 and 2011
                                                                                                                              • Brand Share—Refrigerated/Frozen Bread, Bagels, Bialys and English Muffins

                                                                                                                                • Key points
                                                                                                                                  • T. Marzetti’s larger brands lift its overall sales
                                                                                                                                    • Private label growth exceeds all name brand manufacturers
                                                                                                                                      • Figure 31: Selected FDMx brand sales of refrigerated/frozen Bread, Bagels, Bialys and English Muffins, 2010 and 2011
                                                                                                                                  • Innovations and Innovators

                                                                                                                                    • Key points
                                                                                                                                      • Bread product launches provide healthy perspective
                                                                                                                                        • Figure 32: Bread product launches, by top claims, 2006-11
                                                                                                                                      • Private label’s bread launches keep category fresh
                                                                                                                                        • Figure 33: Private label share of bread product launches, 2006-11
                                                                                                                                        • Figure 34: Leading companies and brands, by bread product launches, 2006-11
                                                                                                                                      • Product innovations
                                                                                                                                        • Private label
                                                                                                                                          • Cultural/international
                                                                                                                                            • BFY
                                                                                                                                            • Marketing Strategies

                                                                                                                                              • Key points
                                                                                                                                                • Bimbo partners with celebrity nutritionist to help consumers achieve goals
                                                                                                                                                  • Social media not a major part of bread brands’ marketing mix
                                                                                                                                                    • Highland Baking’s D.C. Sarnies used as research kitchen
                                                                                                                                                      • TV advertising
                                                                                                                                                        • Pepperidge Farm Goldfish Sandwich Bread
                                                                                                                                                          • Figure 35: Pepperidge Farm/Goldfish Bread, July 2011
                                                                                                                                                        • Bimbo Soft White Bread
                                                                                                                                                          • Figure 36: Bimbo/Soft White Bread, March 2011
                                                                                                                                                        • Pillsbury Crescent Rolls
                                                                                                                                                          • Figure 37: Pillsbury/crescent rolls, November 2010
                                                                                                                                                      • Household Usage

                                                                                                                                                        • Key points
                                                                                                                                                          • Bread products likely to be found in nearly every U.S. household
                                                                                                                                                            • Figure 38: Household bread usage, August 2011
                                                                                                                                                            • Figure 39: Personal bread usage, by age, August 2011
                                                                                                                                                            • Figure 40: Personal bread usage, by household income, August 2011
                                                                                                                                                            • Figure 41: Personal bread usage, by presence of children in household, August 2011
                                                                                                                                                          • Experian Simmons
                                                                                                                                                            • Bread
                                                                                                                                                              • Figure 42: Household bread usage, by age, February 2010-March 2011
                                                                                                                                                              • Figure 43: Household bread usage, by household income, February 2010-March 2011
                                                                                                                                                            • Bagels
                                                                                                                                                              • Figure 44: Household bagel usage, by age, February 2010-March 2011
                                                                                                                                                              • Figure 45: Household bagel usage, by household income, February 2010-March 2011
                                                                                                                                                          • What Matters To Bread Consumers

                                                                                                                                                              • Key points
                                                                                                                                                                • Attributes and positioning that matter to bread buyers
                                                                                                                                                                    • Figure 46: Attributes and positioning that matter most, by gender, August 2011
                                                                                                                                                                    • Figure 47: Attributes and positioning that matter most, by age, August 2011
                                                                                                                                                                    • Figure 48: Attributes and positioning that matter most, by household income, August 2011
                                                                                                                                                                  • Other factors that matter to bread buyers
                                                                                                                                                                      • Figure 49: Other factors that matter, by age, August 2011
                                                                                                                                                                  • Preferences and Purchase Behavior

                                                                                                                                                                    • Key points
                                                                                                                                                                      • Bread buyers show a willingness to try new products
                                                                                                                                                                        • Figure 50: Preferences and purchase behavior, by gender, August 2011
                                                                                                                                                                        • Figure 51: Preferences and purchase behavior, by age, August 2011
                                                                                                                                                                        • Figure 52: Preferences and purchase behavior, by household income, August 2011
                                                                                                                                                                        • Figure 53: Preferences and purchase behavior, by presence of children in household, August 2011
                                                                                                                                                                    • Eating and Buying Habits

                                                                                                                                                                      • Key points
                                                                                                                                                                        • Price rises in importance for bread buyers
                                                                                                                                                                          • Figure 54: Eating and buying habits of bread products in last year, by age, August 2011
                                                                                                                                                                          • Figure 55: Eating and buying habits of bread products in last year, by household income, August 2011
                                                                                                                                                                          • Figure 56: Eating and buying habits of bread products in last year, by presence of children in household, August 2011
                                                                                                                                                                      • Impact of Race and Hispanic Origin

                                                                                                                                                                        • Key points
                                                                                                                                                                          • Bread’s popularity extends to all races/ethnicities
                                                                                                                                                                            • Figure 57: Personal bread usage, by race/Hispanic origin, August 2011
                                                                                                                                                                            • Figure 58: Household bread usage, by race/Hispanic origin, February 2010-March 2011
                                                                                                                                                                            • Figure 59: Household bagel usage, by race/Hispanic origin, February 2010-March 2011
                                                                                                                                                                            • Figure 60: Household usage of tortillas, taco shells, and tostadas, by race/Hispanic origin, February 2010-March 2011
                                                                                                                                                                            • Figure 61: Attributes and positioning that matter most, by race/Hispanic origin, August 2011
                                                                                                                                                                            • Figure 62: Preferences and purchase behavior, by race/Hispanic origin, August 2011
                                                                                                                                                                        • Custom Consumer Groups

                                                                                                                                                                          • Key points
                                                                                                                                                                            • Personal bread usage
                                                                                                                                                                                • Figure 63: Personal bread usage, by gender and age, August 2011
                                                                                                                                                                              • Attributes and positioning that matter
                                                                                                                                                                                  • Figure 64: Attributes and positioning that matter most, by gender and age, August 2011
                                                                                                                                                                                  • Figure 65: Attributes and positioning that matter most, by gender and income, August 2011
                                                                                                                                                                                • Other factors that matter
                                                                                                                                                                                  • Figure 66: Other factors that matter, by gender and age, August 2011
                                                                                                                                                                                  • Figure 67: Other factors that matter, by gender and income, August 2011
                                                                                                                                                                                • Preferences and purchase behavior
                                                                                                                                                                                    • Figure 68: Preferences and purchase behavior, by gender and age, August 2011
                                                                                                                                                                                    • Figure 69: Preferences and purchase behavior, by gender and income, August 2011
                                                                                                                                                                                • SymphonyIRI/Builders—Key Household Purchase Measures

                                                                                                                                                                                    • Fresh bread
                                                                                                                                                                                      • Consumer insights on key purchase measures – fresh bread
                                                                                                                                                                                        • Brand map
                                                                                                                                                                                          • Figure 70: Brand map, selected brands of fresh bread buying rate, by household penetration, 2010*
                                                                                                                                                                                        • Brand leader characteristics
                                                                                                                                                                                          • Key purchase measures
                                                                                                                                                                                            • Figure 71: Key purchase measures for the top brands of fresh bread, by household penetration, 2010*
                                                                                                                                                                                          • Bagels/bialys
                                                                                                                                                                                            • Consumer insights on key purchase measures – bagels/bialys
                                                                                                                                                                                              • Brand map
                                                                                                                                                                                                • Figure 72: Brand map, selected brands of bagels/bialys buying rate, by household penetration, 2010*
                                                                                                                                                                                              • Brand leader characteristics
                                                                                                                                                                                                • Key purchase measures
                                                                                                                                                                                                  • Figure 73: Key purchase measures for the top brands of bagels/bialys, by household penetration, 2010*
                                                                                                                                                                                              • Appendix—Other Useful Consumer Tables

                                                                                                                                                                                                • Personal bread usage
                                                                                                                                                                                                  • Figure 74: Personal bread usage, by gender, August 2011
                                                                                                                                                                                                • Household bread usage
                                                                                                                                                                                                  • Figure 75: Household usage of tortillas, taco shells, and tostadas, by age, February 2010-March 2011
                                                                                                                                                                                                  • Figure 76: Household usage of tortillas, taco shells and tostadas, by household income, February 2010-March 2011
                                                                                                                                                                                                  • Figure 77: Household English muffin usage, by household income, February 2010-March 2011
                                                                                                                                                                                                  • Figure 78: Household English muffin usage, by race/Hispanic origin, February 2010-March 2011
                                                                                                                                                                                                  • Figure 79: Household croissant usage, by age, February 2010-March 2011
                                                                                                                                                                                                  • Figure 80: Household croissant usage, by race/Hispanic origin, February 2010-March 2011
                                                                                                                                                                                                • What matters to bread consumers
                                                                                                                                                                                                  • Figure 81: Other factors that matter, by gender, August 2011
                                                                                                                                                                                                  • Figure 82: Other factors that matter, by household income, August 2011
                                                                                                                                                                                              • Appendix—Trade Associations

                                                                                                                                                                                                Companies Covered

                                                                                                                                                                                                • Applebee's International Inc.
                                                                                                                                                                                                • Bimbo Bakeries USA
                                                                                                                                                                                                • Brinker International Inc.
                                                                                                                                                                                                • Campbell Soup Company
                                                                                                                                                                                                • Denny's Corporation
                                                                                                                                                                                                • Grupo Bimbo S.A.
                                                                                                                                                                                                • Pepperidge Farm Inc.
                                                                                                                                                                                                • Sara Lee Corporation
                                                                                                                                                                                                • U.S. Bureau of Labor Statistics
                                                                                                                                                                                                • Walgreen Co

                                                                                                                                                                                                Bread - US - November 2011

                                                                                                                                                                                                £2,684.63 (Excl.Tax)